If you run a small business you've probably considered purchasing QuickBooks and learning how to use it. You might even feel that you have to do it - like keeping a proper accounting ledger is a must-do for any legitimate business owner. As a side note, I do not believe this to be true. I know of several successful business owners who run their businesses on spreadsheets or whose year-end financials are pieced together from memory and bank statements. Nonetheless, we have been told that good accounting is critical to a business. We have heard countless times on Shark Tank or elsewhere, You don't understand your business if you don't understand its numbers. Perhaps we believe that QuickBooks will help us to understand our numbers, and so we decide to try it out. Maybe is sounds fun to set up and use a new software and customize it with our own logos, product lists, and customers. It feels like a step toward legitimizing our company. Or maybe we are not interested in keeping a set of books, per se, but realize that QuickBooks can help us to perform certain functions, like creating professional-looking estimates or invoices, or printing a big fat stack of checks on laser check stock. Last and least, you may have been shamed into it by your tax accountant who asks you for a QuickBooks file every March and then reacts with surprise and disgust when you remind him that you don't have one, like my friend Benjo Ban. For these reasons and others thousands of small business owners start QuickBooks company files every day. Unfortunately many of these files are abandoned before they ever really get started. Many new users quickly become overwhelmed and give up. You will be more likely to succeed in your QuickBookery if you know what to expect going into it. Here are a couple of things to consider before you get started.

Unfortunately, QuickBooks does not make accounting easy. QuickBooks is a tool to a small business owner in the way that a nail gun and a circular saw are tools of a construction framer building a home. The tools enable the tradesman to work faster and with more accuracy than he would be able to with more primitive tools. But he has to understand engineering and construction concepts and building codes in order to build an inhabitable home. If he does not, the home will not be structurally sound or safe and it will not pass inspection. He may even have to tear the whole house down and start over again. QuickBooks has the reputation of being a simple accounting for dummies type of program. QuickBooks is simple compared to accounting softwares built for very large companies but it is actually quite complex to most people. There are a hundred ways that you can royally screw things up. There have been times I have advised clients to scrap their disastrous QuickBooks files and start over completely. You certainly do not have to be an professional accountant to use QuickBooks successfully. But if you can find someone familiar with accounting and with QuickBooks to give you some one-on-one training and review your work from time to time, you will have a much smoother foray into QuickBooking. I suggest that you have an expert help you to set your file up initially and to establish some processes that work for your business and work flow. Processes will be key to your success. Having a list of the types of tasks you will need to do and how to do them will help you to get your company file up and running.

You've probably heard the saying garbage in, garbage out. If the data entered into your QuickBooks file is trash, your income statement and balance sheet and check register balance will be trash. Your financial statements will only be useful if they are complete and accurate. Part of that is making sure that you haven't accidentally left anything out and that you haven't recorded anything twice. You need to routinely confirm that you have recorded everything that has happened. So how do you make sure that you haven't mistakenly forgotten to record a $300 equipment purchase or a $2,500 sale? Through the process of bank and credit card account reconciliation. You literally match every transaction listed on your monthly bank and credit card statements to a transaction in your QuickBooks file. That sounds tedious but if your bank accounts are set up right and you know how to use the Reconcile tool, it is usually a breeze. You need to reconcile your transactions every month in order to ensure that your records are complete. There are probably other things specific to your business that you can and should be doing on a weekly or monthly basis to ensure that your QuickBooks data is accurate. Have someone familiar with accounting and with QuickBooks create a short checklist of things (including reconciliation) for you to do at the end of each month to make sure your file is in good shape. Then have them check your work monthly or quarterly just to make sure everything remains nice and tidy.

While I don't believe that keeping a QuickBooks (or any other accounting software) file is something that a small business owner has to do to be successful, I think that most small business owners benefit by doing so. QuickBooks is a fantastic user-friendly software. That said, many new users are surprised and overwhelmed with the complexity of the program. Know going into it that you are going to need some help! When you know what you need to do and how you need to do it, and even how you can verify that you've done it correctly, you are well on your way to successful QuickBooking.

A QuickBooks transaction report may display a C, R, or nothing in the CLR column of the report, or in the Register. C means cleared and R means reconciled. The difference between cleared and reconciled in QuickBooks Online is this:

A cleared (C) transaction is one that you know has hit the bank or credit card, but has not yet been officially reconciled in the standard QuickBooks reconciliation process. Transactions may be marked cleared in a few ways, including:

Manually marking the transaction cleared in the Register. Toggle between C, R, and neither by clicking in the cleared column of the Register (signified by a check mark).

Importing a transaction via online banking. All transactions imported via online banking are automatically flagged as cleared since the transactions come straight from the bank, and therefore you know they have in fact hit the bank.

Starting the reconciliation process and clicking the checkbox for a transaction, but leaving the reconciliation without finishing.

A transaction is marked reconciled (R) after you have gone through the standard month-end reconciliation process. All cleared transactions become reconciled transactions when the reconciliation is completed. A transaction is marked reconciled in two ways:

Manually marking the transaction reconciled in the Register. I advise that you do not mark transactions as reconciled in the Register. Using the standard reconciliation process is almost always a better way to ensure that your bank records match your books.

Reconciling the transaction using the standard QuickBooks reconciliation process.

Both cleared and reconciled statuses mean that the transaction has hit the bank account, but I think of cleared as a 'quasi-reconciled' status. It is worth mentioning that you do not have to mark a transaction cleared in order to reconcile it - it is an optional status. I personally do not pay much attention to the cleared status because I generally only reconcile my books to my bank accounts once a month when I am going through the formal reconciliation process. But if I needed to reconcile my books to my bank accounts more often, the cleared designation might be a handy tool to make sure that my books and bank were matching from day-to-day.

It may be helpful to see the journal entry (the debits and credits) behind a QuickBooks Online Payroll paycheck in the new QuickBooks online. In non-payroll transactions, you can see the debits and credits for the transaction by choosing More > TransactionJournal at the bottom of the transaction window. This option is not available in a paycheck but there is another way to see the journal entry. There is a report that's not currently in the Reports menu and so you can't find it without knowing the trick. Here is how to find the transaction journal report and to see the debits and credits behind a QuickBooks Online Payroll paycheck, or any transaction, in the new QuickBooks Online:

Go to Reports

Type "Journal" into the search bar.

Find your transaction by filtering by transaction date

Journal entries for all transactions posted on that date are displayed

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I'm not sure if the new QuickBooks Online version works differently than the previous version with regard to using tabs & arrows to navigate fields and choose list items from drop-down menus such as accounts, customers & vendors, classes, etc. Regardless, users of the new QBO have been frustrated by the 'necessity' of taking their hands off of the keyboard and using a mouse to click on the correct drop-down menu item. The solution is simple. You ready for this? It's the down arrow. I know that you are thinking "Um... no, I've tried that 319 times and it doesn't work." But here's the catch -- it's the down arrow TWICE. I presume that the first time you hit the down arrow, you are hovering over the "+ Add ..." option, though you can't tell because the item does not change colors or highlight itself. Hit the down arrow one more time, and you will find yourself scrolling down your list like you are twirling and spinning through a beautiful green meadow on sunny spring day. Once you've highlighted the correct item, you select it by tabbing to the next field. I wouldn't sell your mouse just yet, but this trick certainly lessens the necessity of using it.